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Denver Housing Authority wants to turn a Sun Valley ‘tank farm’ into riverfront parks and homes

Pollution will have to be removed from the defunct Xcel site.
Credit: Kevin J. Beaty/Denverite
Xcel Energy's "Zuni tank farm" on the edge of Sun Valley. May 13, 2021.

DENVER — If all goes according to plan, the site of a defunct Xcel Energy plant that has processed coal, natural gas, and steam energy over the last 122 years will get a new life hosting a park and homes.

The transformation of the Zuni Street generating station, which is bisected by 13th Avenue near the Platte River, has been in the works since the Hickenlooper (mayoral) administration. The Denver Housing Authority already acquired one piece of it, and aims to officially buy the “tank farm” — where oil was stored — in July for $6.2 million, according to documents filed with the Colorado Public Utilities Commission.

The land is one piece in a redevelopment puzzle that will transform Sun Valley, one of Denver’s lowest-income neighborhoods, into a dense district of homes, businesses and parks with a mix of income-restricted and market-rate housing.

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Ryan Tobin, who is in charge of DHA’s real estate development arm, called the purchase “strategic.”

“From DHA’s perspective, this was a highly sought transaction to assure successful outcomes with all the redevelopment that’s happening there,” Tobin said.

About half of the 8-acre site will be dedicated to park space and the rest will, ideally, become homes, Tobin said. But that’s dependent on meeting state guidelines for decontamination of the long-polluted site and getting an approval from the Denver City Council to rezone the area from industrial to residential.

Xcel has already done some heavy lifting when it comes to cleaning up the site, said Hollie Velasquez Horvath, who is in charge of state affairs and local partnerships. The utility company has met the standards for industrial remediation around the plant, which closed once and for all in 2019 following a tiered shutdown that began in 2016.

But DHA will will be on the hook for additional remediation and the removal of the large tanks on the site. Asbestos and polluted soil could be a problem, Tobin said. The housing authority is planning to secure a grant from the Environmental Protection Agency, for up to $500,000, to fund the decontamination later this year.

Velasquez Horvath with Xcel said the company is selling the land for its assessed price as industrial land — not for its speculative value as residential space — because it will help the city, and the utility is less and less interested in fossil fuels as it transitions to renewable energy.

“We do believe … that we have an opportunity to repurpose that land, potentially, to other uses because as we transition to a clean energy future we know that we wont have a use for those buildings,” Velasquez Horvath said.

Tobin said that, optimistically, the site will be cleaned up and ready to go by the end of 2022.

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